AUSTRAC working to unveil beneficial owners of offshore vehicles

The Australian anti-money laundering agency is leading an international project to uncover the strategies being used to obscure the beneficial ownership of offshore companies and trusts. The project will also explore the role professional facilitators play in setting up and maintaining these structures worldwide.

Peter Clark, chief executive of the Australian Transaction Reports and Analysis Centre (AUSTRAC), said the project was linked to the broader investigation that is underway into the Panama Papers through the Serious Financial Crime Task Force.

Clark said the project was investigating professional facilitators on an international scale to gain a better understanding of the services they provide. It will look at the way these gatekeepers create and manage legal persons and arrangements, he said.

The project will also investigate the ways in which beneficial ownership information can be obtained from a “variety of information sources”. In addition to financial intelligence units, the work is drawing on expertise from banks, trust and company service providers, lawyers and accountants.

The project team aims to release its first report in October. The report will help law enforcement agencies and reporting entities to identify the types of corporate vehicles and arrangements that are used to obscure beneficial ownership.

Operations Hub

AUSTRAC’s new Operations Hub is bringing together stakeholders from the public and private sectors to deal with these emerging challenges. One of its first projects will be to examine the Panama Papers in greater depth. Clark said the participants were identifying intermediaries who were involved in devising, promoting and participating in tax avoidance schemes.

“As we can see, the complexity of our operating environment is increasing. Not only do we have to keep one eye on traditional financial crimes and terrorism financing behaviour, we also need to look to the future and the way in which innovation in financial services can help or hinder us,” Clark told at the Australian Regulatory Summit 2017, run by Thomson Reuters in Sydney on June 6.

Collaboration with industry to continue

Paul Jevtovic, former chief executive of AUSTRAC, was instrumental in facilitating greater collaboration between the financial intelligence unit (FIU) and private sector entities. Clark indicated the agency would continue with this agenda despite Jevtovic’s recent departure.
“Industry is the first and sometimes the last line of defence against serious and organised crime,” he said. “The government and industry have an obligation to work together constructively and cooperatively to address the serious risks to our financial system.”

Clark echoed Jevtovic’s sentiments when he said AUSTRAC would work on a basis of trust but would not hesitate to take enforcement action if that trust was broken.

“This purpose has underpinned our evolution as an agency to collaborate with industry. It is a purpose that will drive us to work more closely with the private sector,” he said.

Cyber crime

AUSTRAC has also launched a project to work with industry stakeholders to identify the financial links to, and indicators of, cyber crime. It aims to generate better leads for law enforcement agencies and to increase the effectiveness of fraud risk profiles.

“I am not able to provide some of the results of these projects today, but I can say that we are identifying new targets and new methodologies that are contributing to national law enforcement investigations. We are also contributing to the industry’s understanding of the risks they face,” Clark said.

Innovation Hub

AUSTRAC has established an Innovation Hub to provide a supportive environment for private sector start-ups. It is also considering the establishment of a regulatory sandbox for fintechs, with a focus on financial technology and services. AUSTRAC was working with a range of fintech start-ups to improve its understanding of their AML/CTF regulatory obligations, Clark said.
Published 08-Jun-2017 by Nathan Lynch, Regulatory Intelligence

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